Amicus Brief: Hause v. Fayetteville

The City of Fayetteville, Arkansas banned short-term rentals (STRs) once they reached 2% of total housing stock, arguing that any lower ratio would damage the city’s “residential” character. The ordinance also discriminates against out-of-state property owners. While local residents may obtain short-term rental permits upon request, out-of-staters must either find a local tenant for at least nine months and then share it with short-term guests or otherwise seek a conditional-use permit subject to several overburdensome restrictions. A couple residing in Texas who make frequent trips to Fayetteville due to the health needs of their daughter, a student at the University of Arkansas, and thus make regular use of STRs, sued to block this ordinance.

The suit against the city has had a few chapters, including a previous one in the Arkansas Supreme Court where the Manhattan Institute also filed a brief. This time, the case is at the Eighth Circuit, and the challenge is based on the Dormant Commerce Clause, which generally prohibits states from discriminating against out-of-state residents in matters of commerce.  MI has filed an amicus brief explaining the importance of STRs in the American economy and the damage that can result from restrictions like Fayetteville's. As the American economy continues to “gig-atize” and Americans’ residential arrangements become more complicated, STRs increasingly serve as an important alternative to the 1950s paradigm that still close off huge swaths of the country to much-needed development and growth. The brief highlights the precedential and policy implications to help persuade the court that a decision ending Fayetteville’s ban would help alleviate the city's housing crisis without causing the economic and social ills detractors claim.

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Trevor Burrus is a legal policy fellow at the Manhattan Institute.

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